Sanoh Industrial's sales grew while its margin collapsed. In the six months to September 2026, the auto-parts maker reported sales of ¥86.3bn, up 9.9%, and operating profit of ¥1.54bn, down 54.2% from ¥3.36bn a year earlier. Ordinary profit fell 61.1% to ¥948mn. The company still posted a net loss attributable to shareholders of ¥244mn.
Management has not blinked on the full year. The company said it is keeping the forecast it published on 14 May: sales of ¥167bn, operating profit of ¥5.5bn, ordinary profit of ¥3.5bn and net profit of ¥1.5bn. Its briefing deck shows the first half at 28.0% of the operating-profit target, against 51.7% for sales. Holding the guide leaves the second half to carry most of the profit.
Where the margin went
Sanoh attributes the profit drop to four items: lower sales in Japan, higher startup costs in the Americas, a partial delay in passing US tariff-related cost increases on to customers, and higher material costs plus one-off charges in Europe. The company said the US tariff measures and Middle East instability kept raw-material and logistics costs elevated.
The Americas are the clearest split between growth and profit. Sales there rose 25.5% to ¥41.2bn, helped by steady sales to Japanese customers in North America, US tariff compensation income and the consolidation of a Mexican subsidiary. Segment operating profit fell 55.0% to ¥490mn on startup preparation costs, the delayed tariff pass-through and currency effects. The deck also cites higher labour costs at Mexican units, including bonus top-ups and severance tied to a plant closure.
Europe swung to a ¥582mn operating loss from an ¥88mn profit. Sales rose 11.1% to ¥10.7bn, which Sanoh attributes to currency translation on flat underlying sales. The company cites material-cost inflation and losses from inventory differences, partly offset by labour savings from a factory closure.
Japan's sales fell 9.5% to ¥15.1bn as the boost from last year's high-value product launch faded, and operating profit halved to ¥629mn. China, where a subsidiary is being liquidated, lost ¥375mn. Asia was the one clear bright spot: operating profit rose 4.2% to ¥1.49bn on higher output in India, despite weaker Thai demand.
The net swing needs context
The move from a ¥2.98bn net profit a year earlier to a ¥244mn loss is not all operating deterioration. The prior-year period included a ¥2.6bn one-off gain from negative goodwill on the Mexican subsidiary acquisition, and a ¥539mn special retirement charge at a German subsidiary. Neither recurred this year.
Currency flattered revenue. The deck's average rates show the dollar at ¥158.2 against ¥148.6, and the euro at ¥184.5 against ¥162.2. The company's own explanations credit translation for part of the sales increase in Europe and Asia.
Balance sheet
Operating cash flow was ¥3.24bn. Cash and equivalents fell ¥7.37bn to ¥17.1bn after a ¥5.83bn long-term loan repayment and ¥4.16bn of capital spending. The equity ratio rose to 35.7% from 33.8% at March. Sanoh kept its interim dividend at ¥14 a share.